Anterior-posterior (A/P) limb patterning in vertebrates is determined by the counteraction between the Sonic Hedgehog (Shh) and the Gli3 transcription factor. Shh exerts its effect on Gli3 by regulating the full-length Gli3 protein processing to generate a Gli3 repressor gradient along the A/P axis of the limb. However, it is not clear whether the full-length Gli3 is an activator in vivo and plays any role in the limb patterning. Here we show that mouse limbs expressing only a Gli3 repressor form exhibit mild polysyndactyly and a partial loss of digit identity, while limbs expressing only a full-length Gli3 protein display severe polysyndactyly and a complete loss of digit identity. Interestingly, when the full-length Gli3 and the repressor are equally expressed in the limb, the digit patterning is overall normal except for an extra anterior digit. Furthermore, in the presence of one Gli3 wild type allele, a Gli3 mutant allele that expresses only the full-length form can rescue the Shh mutant digit phenotype to a great extent. The full-length Gli3 protein can also activate Shh target gene expression without Shh. Thus, our data indicate that the full-length Gli3 protein is an activator in vivo and that the ratio of the Gli3 activator to repressor, but neither the Gli3 repressor gradient nor the Gli3 activator/repressor ratio gradient, determines limb digit patterning.